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The Bank of New Brunswick was established on March 25, 1820 in the pre-Confederation Province of New Brunswick, Canada [1] as the first Canadian bank to operate under a charter. Headquartered in a new building on Prince William Street in Saint John in 1826, the neoclassical bank façade consisted of an Ionic temple of finance. [2]
It was founded by some of the colony's most prominent businessmen. At the time, Saint John was the largest city in the Maritime Provinces, exceeding in population both Halifax, Nova Scotia, and for a time during the 19th century, even Toronto, Ontario.
John Robinson was elected the first President of the Bank of New Brunswick and served until 1824 when he was succeeded by Charles Simonds.
The acquisition of the City Bank of Saint John in 1839 and the Summerside Bank of P.E.I. in 1901, expanded the Bank's network. Following the City Bank acquisition, City Bank president Thomas Leavitt became president of the Bank of New Brunswick.[3] Leavitt came from a family of merchants, shipowners and shipmasters of Saint John, New Brunswick, who were related to the early Simmons, White and Hazen families of Saint John.[4]
The Bank of New Brunswick Building in Saint John, New Brunswick built in 1879 is on the Registry of Historical Places of Canada. [5] The Bank of New Brunswick on 268 Water Street, Summerside, Prince Edward Island, built 1909 to 1910 is on the Registry of Historical Places of Canada. [6]
But by the early part of the 20th century it became apparent that the Bank of New Brunswick lacked the capital needed to remain competitive, and its shareholders accepted an offer to merge with the Bank of Nova Scotia on February 15, 1913. [7] Saint John, the largest City could not attract investment from overseas despite 4% higher returns compared to Upper Canada. The investment funds went to Central Canada. The four banks that had been established in New Brunswick were all closed down or merged after Confederation in 1867. Manufacturing consequently slid in Saint John from 15% of the total output of Canada in 1867 to less than 5% 70 years later.
The four banks in New Brunswick closed or merged because they could not get capital from investors to remain competitive. The Investment went to central Canada. The bank's headquarters ended up in Montreal - the banks follow the investors. The investors fled Saint John because the West was opening up. The Saint John Board of Trade wanted "Commercial Union" with the United States. So did the US and many other Canadians. But the Toronto Board of Trade did not want "Commercial Union". Since the House of Commons was controlled by Ontario having 100 seats, 59 of which were Conservative including Toronto's, and New Brunswick had 19 seats with 3 Liberals from Saint John, Toronto won out. (When Saint John had a population of 100,000 people, Toronto had 40,000) Sir John A, McDonald's Conservative Government voted down the "Commercial Union" bill of March 5, 1888 which would have given Saint John a larger hinterland (the US), and thus continued its economic superiority. But Toronto won the day thanks to Sir John A McDonald and his conservatives. Since Saint John was cut off from Central Canada, and its natural market was the New England, Saint John has been in decline since 1867 - 140 years. Ironically, the Bank of Nova Scotia (Scotia Bank) ended up with its headquarters in Toronto- Canada's baking and Financial Center.
Like the other Canadian chartered banks, it issued its own paper money. The Bank of Canada was established through the Bank of Canada Act of 1934 and the banks relinquished their right to issue their own currency. Around thirty-thousand dollars in notes are currently in circulation. These notes can be reimbursed by the Bank of Canada.